California Expands Pay Data Reporting

In September 2022, the Governor of California signed into law Senate Bill (SB) 1162. This bill expands what is required as it pertains to yearly pay data reports and obliges employers to disclose pay ranges in job ads. SB 1162 will take effect in January 2023. This bill now aligns the Golden State with other states like Washington, New York, Maryland, Nevada, and Colorado. This article looks at the changes SB 1162 makes regarding employer payment data reports. 

Expansion of Yearly Payment Data Reporting in California

SB 1162 expands an existing pay data reporting law that was passed in September 2020. SB 973 requires employers with at least one hundred employees and are obligated to file the EEO-1 with the EEOC to file a wage data report with the CRD every year. SB 1162 makes several changes to this existing law. The following are the changes that SB 1162 makes to the current law. 

Firstly, SB 1162 modifies the timing when wage data reports must be submitted. According to the current law, employers with at least one hundred employees must file such reports every March. According to SB 1162, employers will be mandated to file pay data reports with the CRD every May. 

Secondly, according to SB 1162, employers with employees employed through contractors will not be able to escape the reporting obligation. The law requires employers with at least one hundred employees employed through contractors to file a separate report to the CRD for those workers employed through labor contractors. This means that contractors will have to supply employers with the relevant wage data for the report. Additionally, employers will be required to mention the contractors in the report. 

Thirdly, SB 1162 requires employers to report the median hourly rate and the mean hourly rate for every mixture of ethnicity, sex, and race within every job category. 

Lastly, SB 1162 removes language that allows employers with several companies to submit a combined report with details of all employees and deletes the provision that an employer can file the report filed with EEOC in place of a wage data report. From 2023, employers with more than one company must submit a pay data report for each company. As it stands now, it looks as though an employer might still be able to file one report listing all establishments separately, but the CRD will likely clarify.

An employer who does not abide by the law may be subject to civil penalties. 

How Will These Changes Benefit Employees?

You might be wondering how these changes will benefit you as an employee. SB 1162, which takes effect in January 2023, will boost pay transparency and fight pay discrimination. For example, current law does not address employees hired through labor contractors, which means these employers are at a high risk of being victims of pay discrimination. With the new changes, workers supplied to employers by labor contractors can breathe a sigh of relief. 

Contact a California Employment Lawyer

Are you a California employee who has fallen victim to pay discrimination? If so, contact a qualified California employment lawyer who can help you get the justice you deserve.